The global liquefied natural gas (LNG) market is expected to grow significantly by 2030, and that growth will be met with or without new projects in the United States, according to the CEO of Baker Hughes, the world’s leading supplier of LNG equipment.
US LNG Permit Freeze Raises Questions
The Biden administration’s recent decision to pause the issuance of new LNG export permits has sparked debate within the industry. Proponents of US LNG development argue that the US can be a reliable and secure supplier of this clean-burning fuel, helping to meet rising global demand and reduce reliance on Russia. Opponents, however, express concerns about the environmental impact of LNG production and the potential for increased greenhouse gas emissions.
Despite the US permit freeze, Baker Hughes CEO Lorenzo Simonelli believes other countries will meet the projected growth in LNG demand. “We believe by 2030 there needs to be an installed base capacity of LNG of 800 million tons per annum and either through US projects or international projects, that demand will be supplied,” Simonelli said in a recent interview.
Established and Emerging LNG Producers Step Up
Several countries are well-positioned to ramp up LNG production in the coming years. Qatar, a longstanding leader in the LNG market, is planning a significant expansion of its production capacity. Africa is also emerging as a major player, with Mozambique’s Rovuma Basin project leading the way. The first LNG cargo from this project was shipped to Europe in 2022.
Argentina possesses the world’s second-largest shale gas reserves, concentrated in the Vaca Muerta formation. This resource base has the potential to make Argentina a major LNG exporter, but development will hinge on the country’s ability to streamline permitting processes and attract investment.
While the future of US LNG development remains uncertain, the current permitting freeze has not yet impacted Baker Hughes’ business. According to Simonelli, there have been no cancellations of equipment orders from US companies.
Balancing Demand with Environmental Concerns
The global LNG market is expected to continue growing in the coming years, driven by factors such as population growth, urbanization, and increasing demand for cleaner-burning fuels. However, the industry faces the challenge of balancing this growth with environmental concerns. Technological advancements, such as the use of carbon capture and storage technologies, could play a crucial role in ensuring that LNG development is sustainable in the long term.
Source: Reuters
